Supreme Court's Petition Denial in Clean Air Act Pre-emption Case Reinforces Threat From Common Law Claims

by Faegre Baker Daniels

The United States Supreme Court denied a petition for certiorari earlier this month after the Iowa Supreme Court held in June that the plaintiffs' nuisance claims were not pre-empted by the Clean Air Act (CAA) in Freeman v. Grain Processing Corp., 848 N.W.2d 58, 63 (Iowa 2014). Petitioners Grain Processing Corporation (GPC), defendants in the original action, submitted the petition for certiorari earlier this year. An amicus brief was submitted to the high Court in support of the petition. The National Association of Manufacturers and the National Mining Association signed on to the brief, among others.

The Supreme Court's decision is significant because of its implications for pre-emption of common law tort claims by federal environmental statutes. The Iowa Supreme Court found that the plaintiffs' nuisance claim was not pre-empted because common law tort claims serve a different purpose than the Clean Air Act. The court reasoned that common law tort claims "protect the use and enjoyment of specific property," while the CAA has a general regulatory purpose. This was the case even though the alleged harm was caused by by-products and chemicals created at GPC's facility and released into the atmosphere, a description that bears a striking resemblance to the types of atmospheric substances traditionally regulated by the CAA.

This petition is part of a growing trend of litigation brought by plaintiffs who are using the flexibility of common law claims such as nuisance to address what are essentially environmental harms, and even personal injury damages. The Supreme Court also denied a petition for certiorari in a case that awarded a $104.69 million verdict against Exxon Mobil. Exxon Mobil Corp. v. City of New York, 134 S. Ct. 1877 (U.S. 2014). In that case, claims under New York tort law for Methyl Tertiary Butyl Ether (MTBE) contamination of water wells were not pre-empted by the CAA. Damages awards have also been sought for nuisance or other tort claims without showing that alleged toxic substances are present at levels federal regulations consider unsafe. See, e.g., Adinolfe v. United Technologies Corp., 768 F.3d 1161, 1173 (11th Cir. 2014) (finding plaintiffs did not need to allege groundwater contaminant levels exceeded safe drinking water standards to survive motion to dismiss).

Plaintiffs are also challenging statutes that would constrain this litigation strategy. The Missouri Supreme Court is considering the constitutionality of a statute that would limit nuisance damages against agricultural operations to a decrease in property values, require heightened proof for personal injury claims, and deny other damages for alleged inhibition of the use and enjoyment of property. Labrayere v. Bohr Farms, LLC, SC93816 (oral argument heard on September 2, 2014) (challenge to Mo. Rev. Stat. § 537.296).

The Supreme Court's denial of cert indicates the continued viability of using traditional common law claims to request compensation for what were once considered primarily environmental harms or personal injuries. In states such as Iowa, where "special injuries" due to nuisance are particularly expansive, the lack of CAA pre-emption opens new doors of opportunity to plaintiffs. In addition to continued compliance with federal and state environmental laws, in light of this denial, industry members should not overlook potential liability arising from nuisance and other common law claims.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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